254 Background: Prostate cancer is the second most common malignancy in men worldwide. The development of cancer from prostate tissue involves complex interactions of tumor cells with surrounding epithelial and stromal cells and can occur multifocally, suggesting that prostate epithelial cells may undergo cellular state transitions towards carcinogenesis. Previous studies on localized prostate cancer molecular changes have focused on unsorted bulk tissue samples, leaving a gap in our understanding of the cellular heterogeneity in the tumor microenvironment. Single-cell analyses of tumor specimens have the potential to reveal, at unprecedented resolution, cellular composition, as well as instructive intercellular interactions. Methods: To characterize the localized prostate cancer tumor microenvironment, we performed single-cell RNA-sequencing (scRNA-seq) on prostate biopsies, radical prostatectomy specimens, and matched patient-derived organoids from localized prostate cancer patients. Results: Within prostate epithelial cells, we identified a population of club cells that may act as progenitor cells. Furthermore, we uncovered luminal-like epithelial cellular states augmented in androgen signaling across basal and club cell populations. By classifying tumor cells based on ERG expression status, we found that ERG- tumor cells, in contrast to ERG+ cells, share transcriptomic heterogeneity with surrounding luminal epithelial cells and are associated with common stromal and immune microenvironment responses. These results suggest that specific immune niches may arise based on TMPRSS2-ERG fusion status. Finally, we generated prostate epithelial organoids derived from matched localized prostate cancer patients and characterized their transcriptomic profiles by scRNA-seq. These patient-derived organoids recapitulated tumor-associated epithelial cell states but also harbored distinct cell types and states from their parent tissues. Conclusions: Our data from localized prostate cancer specimens and organoids provide diagnostically relevant insights and will help advance our understanding of the cancer cellular states associated with prostate carcinogenesis.